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China-Led Development Banks Halt Russia, Belarus Lending

The move is the latest attempt to financially isolate Moscow following sanctions imposed by the US, European Union, UK, Canada and Asian nations such as Japan and Singapore.


The AIIB is considering opening an office in Abu Dhabi in the Middle East.
In 2015, China set up the bank as an alternative to the International Monetary Fund and the World Bank. Photo: AIIB.

 

The Beijing-backed Asian Infrastructure Investment Bank said on Thursday it would put all lending related to Russia and Belarus on hold due to the invasion of Ukraine.

Another China-based lender, New Development Bank (NDB), also halted business with the two countries.

The moves are the latest attempts to financially isolate Moscow and Minsk following tough economic sanctions imposed by the US, European Union, UK, Canada and Asian nations such as Japan and Singapore.

 

 

AIIB said in a statement that “all activities relating to Russia and Belarus are on hold and under review”.

Russia is a founding member of the development bank, holding a 6.7% share of its capitalisation. Neither Belarus nor Ukraine are members, however.

“As the war in Ukraine unfolds, [AIIB] extends its thoughts and sympathy to everyone affected. Our hearts go out to all who are suffering,” the statement said.

“AIIB stands ready to extend financing flexibly and quickly and support members who have been adversely impacted by the war, directly or indirectly.”

The bank referred to a “war” in Ukraine rather than the Kremlin’s description of a “military operation” used by other Chinese-government-linked institutions.

“Economic spillover from commodity price shocks, financial market volatility and other factors may adversely impact our members’ economic situation,” the AIIB noted.

“We will work closely with our partner multilateral organisations to provide any needed support expeditiously.”

Shanghai-based NDB said in a statement: “In light of unfolding uncertainties and restrictions, NDB has put new transactions in Russia on hold.

NDB, formerly known as the BRICS Development Bank, was established in 2014 and was funded by Brazil, Russia, India, China and South Africa.

 

  • George Russell

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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